The San Fernando Valley’s home resale market ignored typical seasonal trends during September to post an 18.5 percent increase in home sales and a 24.7 percent jump in condominium closed escrows with the summer’s upbeat activity likely to continue well into the fall, the Southland Regional Association of Realtors reported on Monday, Oct. 26.
A total of 582 single-family homes closed escrow across the Valley, up 18.5 percent from September 2014. Typically, a seasonal slowdown begins to appear in September as vacations end and schools reopen; yet this year sales increased slightly from August with pending sales — a measure of future activity —9.5 percent higher than a year ago.
Similarly, Realtors helped close escrow on 207 condominium transactions, up 24.7 percent from 12 months ago and 10.1 percent ahead of this August. It was the third month this year that condo sales exceeded the 200-sale benchmark, a pattern not seen since 2013 when seven months of that year where higher than 200 sales.
“It’s been a remarkably strong local market,” said Gaye Rainey, president of the 9,100-member Southland Regional Association of Realtors. “We’re not seeing any slowdown, which is unusual for this time of year. Inventory is way down, so that most likely will apply a brake to activity.”
Rainey said it’s too soon to say if the recent implementation of new federal disclosure rules is having an impact on local home and condo transactions. The rules require use of new forms and mandate specific time periods when they must be provided to consumers.
“Most likely the new rules will not have an impact on the buyer or seller’s side if agents anticipate issues and deal with them in a timely manner,” Rainey said. “Lenders say you can count on escrows closing in 45 days, but there are still some lenders who say a closing within 30 days is still possible. So, we’re telling agents if they look for escrow to close within 40 days they should be fine.”
Rainey and Link cautioned parties to a sale to be particularly wary of repairs or changes coming toward the anticipated close of escrow. In some instances, changes may trigger new three-day waiting periods during which time the other party has the right to accept or reject the changes, thus potentially delaying the closing.
Link said the unseasonably heavy sales activity might be partly in reaction to anticipated increases in interest rates on home loans, which remain near historically low levels.
The market is busy “due to low rates and the threat of rate hikes, reasonably strong confidence in the economy, and the fact that most owners now are in an equity position so those who are selling no longer have to consider a short sale,” Link said. “Also, refinancing is very strong as more owners decide to improve their residence and stay put, but the decision to stay in place contributes to no inventory.”
The inventory of homes listed for sale on the Multiple Listing Service operated by the Association continued to dwindle with the 1,728 active listings off 6.7 percent from a year ago. At the current pace of sales, that inventory represents a 2.2-month supply, compared to the 2.8-month stockpile of September 2014 and the 6-month supply deemed to represent a balanced market.
The single-family median price of $555,000 was up 3.7 percent from September 2014, but down 4.3 percent from this August. The median peaked in July at $600,000, a number not seen since 2007.
The condominium median price of $346,000 increased 9.8 percent compared to 12 months ago, but fell 6.5 percent from this August when it hit $370,000, the highest median since November 2007.
Distress sales? There were 18 foreclosure-related sales last month, accounting for a mere 2.3 percent of the market; 31 short sales for a 3.9 percent market share; and 735 standard sales or 93.0 percent of total September activity.
The Southland Regional Association of Realtors® is a local trade association with more than 9,100 members serving the San Fernando and Santa Clarita Valleys. SRAR is one of the largest local associations in the nation.
- 30 -